The hottest three-step M & a routine the pain of t

2022-08-21
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The pain of West axis in the three-step M & a routine reappears the M & a trap

the pain of West axis in the three-step M & a routine reappears the M & a trap

China Construction machinery information

Guide: Recently, CCTV's "focus interview" program broadcast "the pain of West axis joint venture", revealing the lesson that after northwest bearing stock Co., Ltd. was merged by German fag bearing company, West axis' technology, brand and market were ultimately controlled by Germany. The focus interview reminds Chinese people that foreign investment is not a messenger of poverty alleviation, but

recently, CCTV's "focus interview" program broadcast "the pain of West axle joint venture", revealing the lesson that after Northwest Bearing Co., Ltd. was merged by German fag bearing company, West axle's technology, brand and market were ultimately controlled by Germany. The focus interview reminds Chinese people that foreign capital is not a messenger of poverty alleviation, but a group of mercenary economic animals

"three steps" has become a foreign capital M & a routine

foreign capital M & A of mainland Chinese enterprises mostly follow the three-step routine of "joint venture loss sole proprietorship"

the merger and acquisition of Northwest Bearing Co., Ltd. is a typical case. Located in Yinchuan, Ningxia, West axis is a large state-owned backbone enterprise. Among the products of this enterprise, railway bearings accounted for 40% of the national market and 40% of the profits of the whole company before the joint venture. The NXZ trademark of the enterprise is a well-known national trademark, and the West axis is also a major profit and tax payer in Ningxia Hui Autonomous Region

in 2001, West axis, which intended to "market for technology", was a joint venture with German fag company. Among the joint ventures, China accounted for 49% of the shares in 2013 and Germany accounted for 51%. The Chinese side takes shares in land, plant, equipment, brand, market and production qualification, and the German side contributes 8.52 million euros. After the joint venture was put into operation, it was found that fag had not carried out technological transformation and effective management in the previous two years, and had also overhead Chinese managers. In the first year, the joint venture lost 9.8 million yuan, and in the second year, another 13 million yuan

after two consecutive years of losses, China has no funds to continue to increase investment. At this time, Germany immediately invested to buy the original 49% shares of China, and the joint venture became a wholly-owned company. After changing to a sole proprietorship, the products of Fu Anjie company (actually the products of the original West axis) quickly passed the certification of the United States and Britain, developed the international market, improved the production and inspection technology, and the original loss has also become a profit. However, China has lost the achievements of years of hard work such as brand, market and production qualification

it is understood that such a situation as northwest bearing is not uncommon in the country, and some places have formed a model for foreign investors to annex Chinese funded enterprises

XCMG group has also suffered such losses. It is widely said that Carlyle, which is bent on acquiring XCMG, has the shadow of caterpillar behind it, or simply Carlyle is just the intermediary of Caterpillar's attempt to acquire XCMG, and caterpillar is the big owner of the joint venture after the merger. As a "Fortune 500", caterpillar is the world's largest construction machinery enterprise, an old friend and rival of XCMG. As early as 1995, XCMG and caterpillar (Xuzhou) Co., Ltd., which produces excavators, were jointly established with XCMG group, but this was a bitter marriage. XCMG and caterpillar invested a total of US $82million and established caterpillar (Xuzhou) Co., Ltd., which produces hydraulic excavators with a 40:60 share ratio between Chinese and foreign parties. According to the joint venture agreement between the two sides at that time, XCMG will not be allowed to produce excavators after the establishment of the joint venture. As Caterpillar continued to make losses and increase capital and shares, it had already obtained absolute control of the joint venture. Since then, caterpillar has made huge profits from the joint venture. Although the excavator market has been booming in recent years, and the market demand increased by 70% year-on-year in the first four months of 2006 alone, XCMG was unable to get involved and was ready to cry

during the "two sessions" in 2006, Li Deshui, a member of the National Committee of the Chinese people's Political Consultative Conference, said in an interview that it is necessary to resolutely stop any malicious mergers and acquisitions trying to monopolize the Chinese market. "If left to development, the independent brands and innovation capabilities of China's national industries will gradually disappear, and the core parts, key technologies and high added value of domestic leading enterprises may be completely controlled by multinational companies, and even a large number of backbone enterprises will no longer exist." Li Deshui's words alerted the Chinese people like a stone shattering

mergers and acquisitions become "looting"

data from Dealogic, an international research agency, showed that in the first 11 months of 2006, there were 735 foreign mergers and acquisitions of Chinese enterprises, with a year-on-year increase of 1.3%, and the transaction amount was $30.2 billion, with a year-on-year increase of 1%. In the selection of "China's top ten M & A events" in 2006 organized by the mergers and acquisitions Association of the all China Federation of industry and Commerce and the global M & A Research Center, half of the major events of foreign mergers and acquisitions of Chinese enterprises accounted for, indicating that foreign mergers and acquisitions in 2006 were still a hot spot

there is nothing wrong with foreign mergers and acquisitions of Chinese enterprises. However, some foreign investors regard Chinese enterprises as Tangseng meat, and they grasp the three principles of mergers and Acquisitions: not leading enterprises, not mergers and acquisitions, not holding shares, not mergers and acquisitions, not mergers and acquisitions without reaching a certain profitability. Just like the West axis joint venture, it is not so much a merger as a robbery

since the joint venture, Xixiang has not tasted any sweetness, but has been swallowing bitter fruits

in more and more foreign mergers and acquisitions, we can also see many private equity funds - they have no technology and little advanced experience to provide to enterprises. Their purpose is simple, that is, to make money. China is not short of funds for industrial development. Why can't such acquisitions be completed by domestic private enterprises

some domestic scholars regard foreign capital mergers and acquisitions of Chinese enterprises as a panacea for introducing advanced management experience, revitalizing state-owned assets, solving deep-seated contradictions in state-owned enterprises, and optimizing enterprise governance structure, and call it a "new Westernization Movement" in the restructuring of state-owned enterprises. But can this "new Westernization Movement" enable China's state-owned enterprises to come out of the shadow of low efficiency and losses and "expand and strengthen" state-owned enterprises? It is being tested by practice. As multinational companies speed up the pace of mergers and acquisitions, the negative effects of foreign capital mergers and acquisitions are also expanding, which are manifested in: the shrinking of fiscal taxes, the windfall profits from the disposal of non-performing assets caused by hot money venture capital, and the threat of industrial monopoly to national industrial security

compared with multinational companies, Chinese enterprises generally lack international competitiveness. Once foreign-funded enterprises occupy a controlling position, they will crowd out similar enterprises in China with their advantages in technology, capital, scale, brand, etc., and then achieve monopoly in many industries or be at the critical point of monopoly. The monopoly of multinational corporations directly inhibits the development of Chinese national enterprises, making the Chinese E) results reappear: the experimental results can be accessed arbitrarily, and the national brand of enterprises is difficult to establish. Moreover, in the process of foreign capital gradually becoming dominant, foreign-funded enterprises often take various measures to strictly restrict the technological innovation of Chinese enterprises

China has to practice self-defense hard. Originally, it wanted to expand and strengthen the industry through the introduction of foreign capital and technology, but it lost its market advantage and suffered unbearable pain of joint venture. Northwest bearing group, one of China's 100 largest machinery industry enterprises and one of the six large-scale first-class enterprises in the bearing industry, has learned a profound lesson in the joint venture, which has sounded an alarm for China's industrial enterprises to exchange market for technology

then, what is the self-defense skill of Chinese enterprises in foreign mergers and acquisitions

enterprises should be self-esteem and self-improvement. Dancing with wolves without being eaten by wolves is the real entrepreneur. If non investment promotion is not enough for development, we must protect core technologies, independent brands and existing markets in investment promotion. Attract investment, but not wolves. No matter how difficult the reform of state-owned enterprises is, we cannot lose our independence and worship capital. Enterprises should pay more attention to strategy in joint venture matters. The successful experience of private enterprises in self-protection in listing or cooperation with foreign capital is worth learning from by state-owned enterprises

the government should standardize the merger and acquisition procedures. China lacks the procedures and rules for reviewing foreign mergers and acquisitions, the price system and evaluation system for determining reasonable acquisitions, and the mergers and acquisitions of enterprises are not considered from the strategic perspective of industry development. It is obviously not in line with the interests of the state and enterprises to discuss joint ventures at no cost. Western countries have been strictly controlling cross-border mergers and acquisitions in important industries, and actively and effectively intervening in administration and law. The United States has also intervened in the mergers and acquisitions of American enterprises by China's Lenovo Group, CNOOC and Haier. China should also improve the legal and regulatory constraints on cross-border mergers and acquisitions and monopolies, conduct necessary evaluation, review and intervention on cross-border mergers and acquisitions, and conduct necessary management and monitoring on the sale or share expansion of domestic leading enterprises

we should abandon prejudice against local private enterprises. In the mergers and acquisitions of state-owned enterprises, we rarely see private enterprises doing much, because the local government has a deep prejudice against private enterprises, and the deep-rooted concept of "giving to friends rather than domestic slaves" is deep-rooted. In the merger and acquisition of state-owned enterprises, multinational companies I ★ 6) maximum tension and compression alternating load: not less than ± 50kN; Generally, it is the first choice, because the financial resources, technology, brand, etc. of multinational companies are more likely to be favored by local governments, and at the same time, they can also receive the political achievements of introducing foreign capital. As a result, all localities rushed to introduce preferential policies to attract foreign investment at high cost, especially proud of introducing "top 500" mergers and acquisitions of state-owned enterprises, so as to show off the local investment environment

the state should perform the function of industrial management. While paying attention to the management of state-owned assets and the financial figures on the balance sheet, the state should also pay attention to the technology and organization of enterprises. Chinese manufacturing enterprises bear the capacity and development potential of China's industrial technology, and need specific guidance and management by the state, such as industrial planning, supporting, operation coordination, technology research and promotion, etc. The government should never give up its support and management responsibilities for industry before Chinese enterprises have achieved a competitive level compared with enterprises in developed countries after closing state-owned coal mines

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